AT&T, Chernin Group Buy Majority Stake in Leading YouTube Network The move likely values Fullscreen, which counts the fastest-growing subscriber base of any YouTube network, at $250 million.

By Geoff Weiss

Opinions expressed by Entrepreneur contributors are their own.

Old media titans like Walt Disney and DreamWorks have been hungrily eyeing the white-hot YouTube space for years. But among the site's top multi-channel networks (MCN) -- which typically manage thousands of YouTube channels in exchange for a cut of Google ad revenues and sponsorship deals -- there has been one notable holdout on the acquisition block.

Fullscreen, which currently counts the fastest-growing subscriber base of any YouTube network and whose top channels include The Fine Brothers, Shane Dawson, Grace Helbig and Our 2nd Life, announced today that it has sold a majority stake to a joint venture between AT&T and The Chernin Group called Otter Media.

This is the first investment by Otter Media, which was formed last April with $500 million in capital to invest in online video. The company previously made an unsuccessful bid for digital streaming service Hulu.

Related: YouTube Paying Millions to Keep Its Biggest Stars From Looking Elsewhere

Nevertheless, unlike Maker Studios -- Fullscreen's chief adversary, which was acquired by Disney for $950 million in March -- Fullscreen founder George Strompolos made the strategic decision not to sell his company outright.

Having frequently compared Fullscreen to MTV, Strompolos told Bloomberg that that network erred in selling to Viacom at its peak. "They didn't capture nearly the upside they ended up creating. This lets us continue to go for a home run."

Otter's undisclosed stake likely values Fullscreen at $250 million. The transaction is expected to close next month.

Related: Will Multi-channel Networks Disrupt the Traditional TV Model?

Fullscreen, which was founded in 2011 by Strompolos, a former YouTube employee, currently counts a team of 200 worldwide and has already raised $30 million in funding. This latest investment will be allocated towards production, growing an advertising staff, expanding a live-events business and product licensing, Strompolos said. Fullscreen is also rumored to be developing a paid video streaming service.

"What felt like the future of media four years ago has quickly become the new reality," Strompolos wrote in a blog post announcing the deal. "Both Hollywood and Madison Avenue have recently taken notice and truly started to embrace this change."

AT&T, meanwhile, also clearly sees video as seminal to its future. In addition to Otter Media, the company inked a $49 billion mega-merger with DirecTV in May.

Related: How Facebook Is About to Get More Like YouTube

Geoff Weiss

Former Staff Writer

Geoff Weiss is a former staff writer at Entrepreneur.com.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Starting a Business

Her Business Is Solving the $12 Billion 'Porch Pirate' Problem — Here's How a $300 Product Can Keep Your Packages Safe

Melissa Kieling and her son Brennan Naylor co-founded hyve Security to save customers headaches and retailers money.

Business News

Over 1,300 Google Employees Have Signed a New Petition Asking For Job Security

Google laid off thousands of employees in the past two years, which has left some employees feeling insecure about keeping their jobs.

Business News

'I Hate Bureaucracy': Leaked Internal Amazon Document Reveals How the Tech Giant Is Cutting Down on Middle Management

Amazon could soon let go of thousands of managers, resulting in savings of up to $3.6 billion.

Side Hustle

This 29-Year-Old Quit Working 12-Hour Overnight Shifts Because Her Side Hustle Brings In Up to $8,000 a Month: 'It Makes Me Happy'

Breanna Meertins picked up a fun hobby in her free time — then learned about an opportunity that would change everything.